Issue: Managers don't like telling employees that they won't earn a raise.
Risk: Some managers avoid such conflict by giving raises to poor performers, which costs the company and creates liability.
Action: Use these tips to teach managers how to deliver the bad news without fear.
If your merit-based pay plan is truly going to reward top performers—and send a message to underperformers—your organization's supervisors have to stick to their guns.
The most difficult part of a system that withholds merit increases from poor performers is giving the bad news to the employee who hasn't earned a raise. That can be a scary prospect for managers who don't like delivering bad news.
That's where you step in: Help them prepare, so that they don't cave in to the pressure.
Use these four tactics to show managers how to hold their ground:
1. Talk them through it. Provide your supervisors with tools and talking points about topics such as what "superior" and "unacceptable" performances look like, how merit raises should link to employee achievement and growth on the job, and how to deal with the tough questions likely to come from less than stellar performers.
2. Coach them. Before they have "the talk," take managers through role-playing exercises that guide them through difficult conversations. By boosting managers' skills beforehand, you'll feel more confident that the message is getting through accurately, honestly, yet firmly and without sugarcoating.
Being told that a raise isn't in the cards will no doubt produce a reaction, ranging from quiet shock and defensiveness to blame and anger. Rehearsing your responses to such reactions can help defuse the blow.
3. Go public. Help ensure consistency in how raise money is divvied up by sharing with all managers how each one has distributed his pay-increase allotments. This creative use of peer pressure can reveal who stuck to your compensation rules, and who didn't, and encourage better compliance.
4. Offer an option. As a last resort, if withholding pay seems like harsh punishment for an employee with promise, tell managers to consider delaying a merit raise. Sometimes, giving an employee three to six months to turn things around can benefit both sides.